Today, USCF launched the USCF Daily Target 2X Copper Index ETF (CPXR), the latest fund to join USCF’s growing library.
CPXR is an actively managed fund with a net expense ratio of 1.20%. The fund’s goal is to provide leveraged results of double the daily returns of the SummerHaven Copper Index.
The SummerHaven Copper Index is curated to provide a benchmark for copper futures. Within the index’s portfolios are a selection of copper futures contracts that are trading on the Commodity Exchange. These contracts are chosen following intensive quantitative analysis by the index’s management team.
Copper Contracts Explained
In order to provide double the daily exposure to the index’s returns, CPXR engages with cash-settled copper futures contracts. Entering as a buyer, the fund gains returns from the counterparty, should the price of the futures contract rise. When these contracts near expiration, CPXR will roll into new contracts to preserve its leveraged exposure.
At times, CPXR may also opt to enter into reverse repurchase agreements. Hence, these may be done to both help maintain leveraged exposure to the underlying index.
For the purpose of providing collateral for its leveraged copper futures strategy, CPXR will invest in a variety of other securities. These can include money market funds, corporate debt, and U.S. Treasury bonds, among others.
Funds that seek leveraged daily results like CPXR can carry a degree of potential risk for investors. As such, investors may wish to have a thorough understanding of the copper futures market before opting for leveraged exposure. That being said, funds like CPXR could be in an excellent position to capitalize on overperformance in the copper market.
Currently, USCF offers a wide variety of exchange traded products and ETFs for interested investors. Many of these funds and products leverage USCF’s extensive experience in navigating the commodities market.
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